Private equity firms are nervously awaiting the Government’s first Budget after Rachel Reeves has refused to rule out a capital gains tax hike.
Last week, the Chancellor warned that difficult decisions were required to plug a £22billion budget black hole that was discovered after Labour won the Election last month.
When asked if capital gains tax would increase, Reeves told Bloomberg: ‘It’s always important when you’re deciding tax policy to strike the right balance.’
Cuts: Last week, the Chancellor Rachel Reeves (pictured) warned that difficult decisions were required to plug a £22bn budget black hole
She said her administration’s position would be made clear at the Budget on October 30.
‘Of course, you need to bring in the revenue to fund vital public services, but we’ve also got to grow the economy and I won’t do anything that makes it harder to achieve that economic growth and prosperity,’ Reeves added.
Capital gains is a levy on the profits made on the sale of an asset that has increased in value.
Higher earners pay a 24 per cent levy on gains from residential property or 20 per cent on gains from other assets. The rate could be hiked to match income tax, meaning a rate of 40 per cent or 45 per cent.
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